The addition of water keeps the initial cooking temperature low and gentle, so the meat retains its moisture and stays tender as the fat renders. Plus, since the water helps render the fat, there will be significantly less splatter as your bacon finishes in the pan.
Also, by the time the water reaches its boiling point, the bacon fat is almost completely rendered. This will help keep the meat bacon from burning, since you now don’t have to wait for the fat to cook off like you would if you cooked it the traditional way, instead of in water.
Now your bacon is tender and crisp, not dry and brittle—perfect for your next BLT.